ADVISORY Master Data Management It s not just about a new concept, it s about bringing real value to the business Data is at the heart of nearly any business. Being able to rely on the consistency and reliability of data is key to improving performance and reducing costs in numerous areas, from sales and marketing to manufacturing and the supply chain. In an era where many consider data to be the basic fuel for innovation and growth, many organisations still struggle to use their data to their best advantage. Ensuring consistency and working towards higher data quality is vital if the full potential of business data is to be realised. This is where Master Data Management (MDM) comes in. MDM aims to make master data consistent across an entire organisation. At a basic level, MDM brings an end to multiple (potentially inconsistent) versions of the same master data in different systems and/or business units. More and more organisations believe that MDM can bring significant value to their business. In fact, once they have taken the first successful steps in harmonising data using MDM, they often need no further inducement. Its value is immediately apparent. On 4 June 2013, KPMG facilitated experts in this field to share their valuable experience in a roundtable discussion. This document provides a brief overview of the discussion, which was fuelled by presentations from Anwar Mirza (TNT Express) and Gert Jan Huisman (Heineken).
2 KPMG Master Data Management MDM is boring. Let s start talking business Anwar Mirza Master Data Management is currently highly underestimated; it can bring significant value to many organisations and just needs to be presented in a manner which appeals to the business. It all starts with identifying real-life business scenarios where, perhaps, management is not aware that the root cause of an issue is poorly-managed Master Data. In Anwar Mirza s view, placing a financial value on the cost of rectifying these business issues paves the way to establishing an MDM programme within a company. Before presenting a problem to senior management, it is important to truly understand all aspects of MDM from its definition; to the different types; to its ownership and, most importantly, how it impacts the business in tangible and practical terms. Practitioners should know how Master Data governance fits into the company s overall data governance approach and framework. In my experience, it takes time to get to this stage, but this investment is essential before trying to proceed further. Mirza stressed the importance of not using IT jargon when creating awareness of the issue and also the importance of awareness being spread to all levels of management. The
3 KPMG Master Data Management business is simply not interested in the opportunity to deploy technology. Nobody cares because MDM, in itself, is boring. Instead, you need to convince management of the business advantages. If you can tell a manager that his company didn t invoice customers to the value of thousands of euros, you are far more likely to get their attention than talking about customer master databases. A single view of the customer will always be more convincing than trying to persuade them of the need for data consistency for its own sake. You need to relate your MDM programme to the business or you risk failure! One of the real challenges is knowing where to start on the MDM journey. Mirza considers a formal and comprehensive business case an important instrument to enable a company to focus on the right elements, but also stressed a number of other things. One of these was intensely pragmatic. Improvements to Master Data do not necessarily require capital expenditure from the outset. You should consider the possibilities of regular (non-capital) budgets to get your company started this a far easier way of obtaining funds. You should also map the tools that are currently available in the organisation. Make use of operating budgets and readily available tools for as long and for as many governance components as possible. The MDM business case must be presented from several perspectives. The cost of fixing a known business issue should be demonstrated while also showing the risk of not having MDM in place. I wish I could say that MDM investments are driven by revenue-generating opportunities. In reality, most funding will be won through the need to fix a problem or avoid risk. Mirza pointed out that requests for capital expenditure are never popular but once process timelines are slashed and quality is improved the overall gains will be abundantly clear. When the business can clearly see the value of better data, then you have achieved your target of making MDM a core business process and at the heart of your company s decision-making. Get clean - stay clean Gert Jan Huisman A single source of truth is of utmost importance to Heineken, and there remain opportunities for improved leveraging of MDM on a global scale. Gert Jan Huisman gave the audience an intriguing glimpse into how Heineken is working on MDM as an integral part of its transformation programme, aimed at giving the company better insight into its yearly spend of 6 billion. Huisman has set up a team that is rolling out MDM throughout Heineken s country organisations. So far, the team has delivered MDM to six countries and is working on another eight. In three years time, MDM will be in place in 27 countries. The tools being used are Business Objects Data Services and Xcelsius. However Huisman has found that, more important even than the tools, is the right approach to get things up and running. Huisman elaborated on the guiding principles of the approach being used at Heineken: Data ownership in the business Data production at the source Master Data strategy is owned by function Respect for segregation of duties Centralised control function in IT Support processes organised by workstream Application of continuous improvement These important principles contribute to Heineken s successful method of approaching the roll-out. One of its success factors is the step-by-step approach: We really spend time thinking about where to start, based
KPMG Master Data Management 4 on our knowledge of how countries have performed in the past. In this way, we re able to roll out on a piece-by-piece basis, in a controlled manner. Another aspect of this step-by-step approach is that Heineken isn t targeting a big bang in terms of achieving MDM for all processes at once. We deliberately started on the procurement side. It gave us the opportunity to earn significant money for the business amongst others factors, by being better informed in contract negotiations with global suppliers and this has contributed to the awareness of the potential of MDM. This strategy has worked well to convince people in the business who may have been slightly reluctant. HR and sales are now knocking at our door. Another important element in the success of the roll-out has been the conviction that the end result has to look good. Huisman showed the audience the attractively designed dashboard that provides insights into the various aspects of data quality that is adjusted on a weekly basis. This dashboard has really won over with the business. Responding to a question from the audience on the possibility of translating the dashboard into financial values: Ultimately, we d like to see the monetary advantage of the scores on the dashboard. For now, that s not possible. However, the dashboard is a major driver of awareness. The business really sees the advantages of MDM now, with the result that
KPMG Master Data Management 5 we sometimes need to temper their ambitions regarding data quality. Aiming for a score of 100% is not necessary and probably not realistic. The success of the Heineken roll-out is encouraging. Nonetheless, this success has required a lot of work from the data stewards in Huisman s team and the business, starting with initial data cleansing: Data cleansing is intensive and focuses on four elements: Validity, Completeness, Accuracy, Duplication and Uniqueness. Regarding this last, we have been able to reduce the number of vendors by a factor of 10. Duplication in the data was always a major frustration and now that we have better insights into our vendors, this has translated into significant improvements in our contractual arrangements with them. Data cleansing may also lead to the occasional debate at local level, where management sometimes feels they would prefer a more tailored approach. As an example: One business stated that it would be helpful to distinguish the Canary Islands as a separate country. Which of course is not the case, as it forms part of Spain. They may have had a good argument for their position but there are even more compelling reasons not to make such exceptions. Overall, this wouldn t bring added value for Heineken as a whole. And making exceptions on a local level could possibly lead to errors in processes, for instance when it comes to Customs paperwork. In rolling out the programme, we always stressed the overall Heineken interest. We expect each business to look beyond their own country or domain. That s one of the basics of the One Heineken programme. There is still a lot of work to be done. But MDM is starting to become part of our company DNA. In addition to the presentations there was plenty of time for discussion and knowledge-sharing which was greatly appreciated by the attendees. In fact there was a clear call for a continuing effort to bring peers together to discuss topics and themes in the data management arena. No doubt this call will be answered by KPMG. KPMG is a leading Data Management Consultancy firm.
Contact Ronald Jonker Service Leader Enterprise Data Management KPMG Advisory N.V. tel. +31 10 453 4113 mobile +31 6 512 05 427 e-mail: jonker.ronald@kpmg.nl KPMG Laan van Langerhuize 1 Amstelveen P.O. Box 74500 1070 DB Amsterdam The information contained herein is of a general nature and is not intended to address the circumstances of any particularindividual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that suchinformation is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act onsuch information without appropriate professional advice after a thorough examination of the particular situation., registered with the trade register in the Netherlands under number 33263682, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. Printed in the Netherlands. The KPMG name, logo and cutting through complexity are registered trademarks of KPMG International.